BETTER BUSINESS BETTER WORLD

governments making the repayments and an additional coupon if evidence shows
that programmes achieve pre-agreed outcomes. 197 In Swaziland, for example,
aid donors are exploring using a DIB to fund a new approach to antiretroviral
treatment for HIV and TB – allowing them to share risks with private investors
while also gaining from the private sector’s skills in complex coordination and
performance management. 198
Green bonds are conventional bonds, issued by corporations, cities, commercial
banks, development banks or national governments, whose proceeds are
earmarked for projects with climate or other environmental benefits. The first
“labelled” green bond was issued by the European Investment Bank in 2007. 199 By
2015, US$42 billion of green bonds were issued. 200 Estimates suggest that up to
US$100 billion of green bonds could be issued by the end of 2016. 201 There are still
concerns about the lack of a consistent definition for what makes a bond “green”;
pressures for standardisation and independent verification are growing. The faster
one set of common market standards and practices emerges, the faster green bonds
will become both more liquid and also more efficiently priced. This is essential if
green bonds are to scale; today they account for significantly less than 0.5 percent
of the total bond market. 202
Crowdfunding platforms use the internet’s capacity to reduce transaction costs
as a way to enable large numbers of people to invest small amounts of money
(primarily through debt, but increasingly through equity as well). 203 The website
Kiva, for example, has matched 1.6 million lenders to 2.2 million borrowers since
its launch in 2005, with a total of US$949 million lent via the site. 204
New insurance mechanisms are creating powerful new ways of building resilience
among some of the world’s poorest people and countries. These are the least
likely to hold insurance, with 70 percent of global economic losses resulting from
uninsured risks. 205 In the Caribbean, for example, where flood and tropical storm
damage has caused over US$5 billion of damage in the last 30 years, new weatherindex
based insurance products are providing cover to low-income people and
lending institutions exposed to climate losses to help them manage the risks of
more frequent and severe extreme weather events. 206
Blockchain or mutually distributed ledger systems are creating new ways of
keeping records securely and across multiple locations. All users “hold” the
ledger in a distributed fashion, transforming the role of “trusted” third parties. 207
Already, the technology is being used for applications as diverse as land ownership
registries, individual identity records, and custody of natural assets like fish or
forestry products.
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